OUTLINE

The
Telecommunications Legislation Amendment (Consumer Protection) Bill
2013 (the Bill) makes a number of amendments to telecommunications
legislation to strengthen consumer protections and improve the
telecommunications co-regulatory framework.

The measures
contained in the Bill have been prepared in response to
recommendations coming out of reviews conducted by the Department
of Broadband, Communications and the Digital Economy (the
Department) of:

· the Telecommunications Industry
Ombudsman (TIO) scheme, provided for in Part 6 of the
Telecommunications (Consumer Protection and Service Standards)
Act 1999 (Consumer Protection Act); and

The amendments
to the Consumer Protection Act are intended to improve the
operation of the TIO scheme in a number of areas by:

· providing greater clarity about the
TIO’s role and expected standards of operation by requiring
the TIO scheme to comply with standards determined by the Minister,
following consultation with the TIO and the industry regulator, the
Australian Communications and Media Authority (ACMA);
and

· requiring periodic public reviews of
the TIO scheme conducted by a person or body independent of the TIO
and the telecommunications industry.

The amendments
to the Telecommunications Act are intended to streamline and
improve the process for developing and amending industry codes
under Part 6 of that Act by:

· enabling industry codes to be varied
(rather than being required to be wholly replaced);

· extending the application of the
reimbursement scheme for developing consumer-related industry
codes to also apply to varying consumer-related industry codes;
and

· requiring code developers to conduct
transparent and accountable code development processes by
publishing on their websites:

­ draft codes and draft variations;
and

­ any submissions received from
industry participants and members of the public about the draft
code or draft variation.

The Bill also
contains amendments to the Do Not Call Register Act 2006
(DNCR Act) prepared in response to feedback received by the
Department from the ACMA about the operation of that Act. These
amendments are intended to enhance the operational efficiency of
the DNCR Act by clarifying the meaning of ‘cause’ in
relation to the party responsible for making telemarketing calls
and sending marketing faxes where third parties are carrying out
the marketing activities.

Part 1 of
Schedule 1 to the Bill provides the amendments to the DNCR Act and
the Telecommunications Act.

Part 2 of
Schedule 1 to the Bill provides the amendments to the Consumer
Protection Act.

FINANCIAL IMPACT
STATEMENT

The
Bill makes amendments to the reimbursement scheme in Division 6A of
Part 6 of the Telecommunications Act, which enables industry bodies
and associations that develop consumer-related industry codes to be
reimbursed by the ACMA for their costs in developing those codes.
The amendments in the Bill (items 17 to 30) extend the application
of the reimbursement scheme so that industry bodies and
associations can also seek reimbursement of their costs incurred in
varying a consumer-related industry code.

Although the proposed amendments to
the current reimbursement scheme may result in an increase in
Commonwealth expenditure, the amount of additional expenditure in a
financial year (being the total amount of costs reimbursed to
industry bodies and associations by the ACMA in relation to
variations to consumer-related industry codes) is directly
referable to the additional amount of revenue the Commonwealth will
obtain during the next financial year through an increase in
carrier licence charges permitted by the Telecommunications
(Carrier Licence Charges) Act 1997 . The Commonwealth’s
additional expenditure, through the ACMA, on funding variations to
telecommunications consumer-related industry codes is recouped from
telecommunications carriers through carrier licence charges. For
this reason, extending the application of the reimbursement scheme
to also reimburse industry bodies and associations for their costs
in varying consumer-related industry codes (as implemented by the
Bill) is not expected to have a financial impact on Commonwealth
revenue or expenditure.

The
Bill will not otherwise have a significant impact on Commonwealth
expenditure or revenue.

STATEMENT OF COMPATIBILITY WITH
HUMAN RIGHTS

Prepared in accordance with Part
3 of the Human Rights (Parliamentary Scrutiny) Act
2011

This Bill is
compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of
the Human Rights (Parliamentary Scrutiny) Act
2011.

Overview of
Bill

The Bill makes
a number of amendments to telecommunications legislation to
strengthen consumer protections and improve the telecommunications
co-regulatory framework. The main changes include streamlining
the process for amending registered industry codes under the
Telecommunications Act and providing greater regulatory clarity
around the TIO’s role and expected standards of operation
under the Consumer Protection Act. In part, the proposed
amendments to the Telecommunications Act require the body or
association responsible for developing a code to publish material
on its website, including submissions received from individuals
(see proposed new subparagraphs 117(1)(f)(iii) and
119A(1)(f)(iii)).

Human rights
implications

This Bill does
not engage any of the applicable rights or freedoms. In coming
to this conclusion, consideration was given to the prohibition on
interference with privacy and attacks on reputation (contained in
Article 17 of the International Covenant on Civil and Political
Rights). Proposed new subparagraphs 117(1)(f)(iii) and
119A(1)(f)(iii) in the Bill do not require personal information to
be published and the relevant body or association would be required
to comply with its obligations under the Privacy Act
1988 .

Conclusion

This Bill is
compatible with human rights and freedoms because it does not
engage any of the applicable rights or freedoms.

The Do Not Call Register established
under the Do Not Call Register Act 2006

Telecommunications Act:

Telecommunications Act
1997

TIO:

Telecommunications Industry
Ombudsman

NOTES ON CLAUSES

Clause 1
- Short title

Clause 1
provides that the Bill, when enacted, may be cited as the
Telecommunications Legislation Amendment (Consumer Protection)
Act 2013 .

Clause 2
- Commencement

Clause 2
provides for the commencement of the Bill.

Clauses 1 to 3
of the Bill, and any other provisions not covered elsewhere in the
table provided at subclause 2(1), are to commence on the day the
Bill receives the Royal Assent.

Part 1 of
Schedule 1 to the Bill is to commence the day after the Bill
receives the Royal Assent.

Part 2 of
Schedule 1 to the Bill is to commence on a single day to be fixed
by proclamation. However, if Part 2 of Schedule 1 is not proclaimed
to commence within the period of six months beginning on the day on
which the Bill receives the Royal Assent, then Part 2 of Schedule 1
is to commence on the day after the end of that six month
period.

Part 2 of
Schedule 1 to the Bill contains amendments to the Consumer
Protection Act. Delayed commencement of Part 2 is proposed to allow
adequate time for a legislative instrument, provided for by the
amendments in Part 2, to be prepared before the commencement of the
amendments to the Consumer Protection Act. Section 128 of the
Consumer Protection Act, as amended, will require the TIO scheme to
comply with any standards determined by the Minister under that
section. It is anticipated that this determination, if made, will
commence at the same time as Part 2 of Schedule 1.

Clause 3
- Schedule(s)

Clause 3
provides that each Act specified in a Schedule to the Bill is
amended or repealed as set out in that Schedule and any other item
in a Schedule to the Bill has effect according to its terms. The
Bill has one Schedule which contains amendments to the DNCR Act,
the Telecommunications Act and the Consumer Protection
Act.

· prohibiting the making of
unsolicited telemarketing calls, or the sending of unsolicited
marketing faxes, to an Australian number that is registered on the
Do Not Call Register, subject to certain exceptions (see sections
11 and 12B); and

· requiring that agreements for the
making of telemarketing calls, or the sending of marketing faxes,
must require compliance with the DNCR Act (see sections 12 and
12C).

More
specifically, subsection 11(1) of the DNCR Act provides that a
person must not make, or cause to be made, an unsolicited
telemarketing call to an Australian number registered on the Do Not
Call Register. Subsection 11(9) extends the meaning of
‘cause’ to ensure a person (the first person) remains
responsible for the telemarketing calls, even if they have made
arrangements for another party to provide the actual telemarketing
services. Section 12 prohibits the first person from entering into
a contract with another party to undertake telemarketing calls
where the contract contains no express provision that requires the
other party to comply with the DNCR Act.

Similar
provisions apply in relation to the sending of unsolicited
marketing faxes under sections 12B and 12C of the DNCR
Act.

Under the DNCR
Act, the ACMA is responsible for instituting proceedings for the
recovery of any pecuniary penalties payable for contravention of a
civil penalty provision. In some instances, the ACMA has
encountered difficulty in establishing evidentiary links between
the first person and the other party providing the telemarketing
and/or fax marketing services. This has commonly arisen because
agreements between the parties relate to the sale and/or marketing
of the first person’s goods or services without any specific
reference to the means by which the goods or services are to be
sold and/or marketed.

The proposed
amendments to the DNCR Act will capture instances where unsolicited
telemarketing calls are likely to be made, or unsolicited marketing
faxes are likely to be sent, in fulfilment of a contract,
arrangement or understanding, rather than as a result of an
undertaking to specifically do so under a contract (or the
like).

Item 1
- Section 4

Item 1 inserts
a proposed definition of ‘give effect to’ in section 4
of the DNCR Act which, in relation to a contract, arrangement or
understanding, is taken to include doing an act or thing in
pursuance of, or in accordance with, the contract, arrangement or
understanding. These words are currently used in paragraphs
11(9)(c) and 12B(10)(c) of the DNCR Act and will also be used in
new paragraphs 12(1)(a) and 12C(1)(a) and amended paragraphs
12(1)(c) and 12C(1)(c) (see items 3, 4, 6 and 7, below). The
proposed definition correlates with the definition of ‘give
effect to’ used in the Competition and Consumer Act
2010 .

Inserting this
definition standardises the use of the term across Part 2 and Part
2A of the DNCR Act and makes clear that ‘giving effect to a
contract, arrangement or understanding’ is intended to have a
broad meaning.

Item 2
- Paragraph 11(9)(b)

Item 2 repeals
paragraph 11(9)(b) of the DNCR Act. Repealing this paragraph makes
it clear that there is no requirement for a contract, arrangement
or understanding to expressly provide for the making of
telemarketing calls before the first person will be taken to have
‘caused’ a telemarketing call to be made.

Item 3
- Paragraph 12(1)(a)

Item 4
- Paragraph 12(1)(c)

Section 12 of
the DNCR Act mandates that agreements for the making of
telemarketing calls must require the telemarketer to comply with
the DNCR Act. Together, items 3 and 4 alter the test for when a
person (the first person) is prohibited from entering into a
contract, arrangement or understanding with another person in
relation to the making of telemarketing calls.

Item 3 repeals
paragraph 12(1)(a) of the DNCR Act and substitutes a new paragraph.
This amendment will operate similarly to the proposed amendment to
paragraph 11(9)(a) (see item 2, above) and make it clear that there
is no requirement that a contract, arrangement or understanding
expressly provides for the making of telemarketing calls before
subsection 12(1) of the DNCR Act will apply. Instead, under
proposed new paragraph 12(1)(a) it will be sufficient if there is a
reasonable likelihood that the other person will give effect to the
contract, arrangement or understanding by making telemarketing
calls (or causing the employees or agents of the other person to
make the calls).

Item 4 removes
the reference in paragraph 12(1)(c) of the DNCR Act to the making
of telemarketing calls being ‘covered by’ the contract,
arrangement or undertaking and replaces it with a requirement that
the calls be ‘made in order to give effect to’ the
contract, arrangement or undertaking. This amendment is intended to
similarly make it clear that a contract, arrangement or
understanding need not specifically refer to making telemarketing
calls before the obligation in subsection 12(1) of the DNCR Act
applies.

Item 5
- Paragraph 12B(10)(b)

Item 6
- Paragraph 12C(1)(a)

Item 7
- Paragraph 12C(1)(c)

The amendments
proposed in items 5, 6 and 7 in relation to sections 12B and 12C
are the same amendments as those discussed in relation to sections
11 and 12 (see items 2 to 4, above) except that sections 12B and
12C relate to the sending of marketing faxes, rather than the
making of telemarketing calls.

Telecommunications Act
1997

Part 6 of the Telecommunications Act sets out
the arrangements for industry codes and industry standards and, in
part, enables bodies or associations representing industry sections
(code developers) to develop codes and register them with the
ACMA.

Items 8 to 30 of the Bill amend Part 6 in
relation to industry codes to:

· require code developers to publish
on their websites:

­ draft codes intended to be
registered under Part 6; and

­ any submissions received from
participants in the industry section or members of the public in
relation to the draft code;

· enable industry codes registered
under Part 6 to be varied (rather than being required to be wholly
replaced) following a process similar to that for developing
industry codes, but limited to the provisions of the code affected
by the variation; and

· extend the application of the
reimbursement scheme in Division 6A of Part 6 for developing
consumer-related industry codes to also apply to varying
consumer-related industry codes.

Item 8
- Subparagraph 117(1)(e)(i)

Item 9
- At the end of paragraph 117(1)(e)

Item 10
- Subparagraph 117(1)(f)(i)

Item 11
- At the end of paragraph 117(1)(f)

Items 8 to 11
amend section 117 of the Telecommunications Act, which sets out the
requirements for registering an industry code under Part 6 of that
Act.

Paragraph
117(1)(e) sets out the matters of which the ACMA needs to be
satisfied, in relation to a code developer’s consultation
with industry participants on a draft of the code, before the code
can be registered under Part 6.

Item 8 amends
subparagraph 117(1)(e)(i) to specify that the code developer must
publish a draft of the code on its website, in relation to
consulting with industry participants on the draft code.

Item 9 adds a
new subparagraph 117(1)(e)(iii) to require the code developer to
publish on its website any submissions received from industry
participants about the draft code during the submission period
specified by the code developer.

The new
requirements proposed in items 8 and 9 are intended to improve
transparency and accountability in relation to the development of a
code.

Paragraph
117(1)(f) of the Telecommunications Act sets out the matters of
which the ACMA needs to be satisfied, in relation to a code
developer’s public consultation on a draft of the code,
before the code can be registered under Part 6.

Items 10 and 11
provide for an amendment to subparagraph 117(1)(f)(i) and the
addition of a new subparagraph 117(1)(f)(iii) similar to those
described in relation to items 8 and 9 above, namely to require the
code developer to publish both a draft of the code on its website,
as well as any submissions received from members of the public
about the draft code during the submission period specified by the
code developer.

Item 12
- After section 119

Item 12 inserts
a new section 119A into Part 6 of the Telecommunications Act that
sets out the requirements for varying a registered industry
code.

Proposed
section 119A is intended to provide code developers with a more
streamlined process for making changes to industry codes registered
under Part 6 of the Telecommunications Act and, in so doing, enable
code developers to be more responsive to emerging issues. This is
to be achieved principally by:

· enabling codes to be varied, rather
than being required to be wholly replaced (as is currently provided
for in section 120 of the Telecommunications Act);

· only requiring the ACMA to consider
the provisions of the code affected by the variation (see proposed
paragraph 119A(1)(d));

· requiring a code developer to
consult with required stakeholders only in relation to the
variation to the code (see proposed paragraphs 119A(1)(e) to
119A(1)(k)); and

· waiving the requirement for a code
developer to consult with industry and members of the public if the
draft variation is minor in nature.

Under proposed
section 119A, the body or association that developed a code
registered under Part 6 is able to submit a draft variation of the
code to the ACMA for approval.

The ACMA is
required to approve the draft variation if the ACMA is satisfied
that:

· disregarding any provisions of the
code that are not affected (directly or indirectly) by the
variation, the code (as proposed to be varied) provides appropriate
community safeguards or deals with the matters in an appropriate
way, depending on the nature of the matters;

· the body or association has
published the draft variation on its website, invited participants
in the relevant industry section to make submissions within a
period of at least 30 days (see proposed subsection 119A(4)),
considered any such submissions received and published those
submissions on its website;

· the body or association has
published the draft variation on its website, invited members of
the public to make submissions within a period of at least 30 days
(see proposed subsection 119A(4)), considered any such submissions
received and published those submissions on its website;

· the ACCC has been consulted about
the development of the draft variation;

· the TIO has been consulted about the
development of the draft variation (except where the code (as
proposed to be varied) deals with telemarketing or fax marketing
matters);

· at least one consumer representative
body or association has been consulted about the development of the
draft variation; and

· where the draft variation relates to
privacy issues, the Information Commissioner has been consulted
about the development of the draft variation and the ACMA believes
the Information Commissioner is satisfied with the draft
variation.

Similar to the
current arrangements in subsection 120(2) of the Telecommunications
Act, where a draft variation is of a minor nature, the requirements
for consultation with industry participants and the public in
paragraphs 119A(1)(e) and (f) will not apply to the code variation
approval process. This will further streamline the approval process
for varying the code in the event of minor changes.

The reduced
consultation requirements for making minor changes to registered
codes have been included in proposed section 119A to replace the
current arrangements (contained in subsection 120(2) of the
Telecommunications Act) for making minor changes to industry codes
(see item 15, below) when replacing a registered code.

Proposed
subsection 119A(3) provides that if the ACMA approves a draft
variation of a code, the code is varied accordingly.

Item 13
- Subsection 120(1)

Item 14
- Subsection 120(1)

Item 15
- Subsection 120(2)

Section 120 of
the Telecommunications Act currently requires changes to an
industry code to be made by replacing the code. The proposed
amendments in items 13 to 15 to section 120 of the
Telecommunications Act are a consequence of the introduction of the
code variation approval process in proposed section 119A (see item
12, above).

Item 13 is
consequential to the repeal of subsection 120(2) of the
Telecommunications Act by item 15 of the Bill.

Item 14 amends
subsection 120(1) of the Telecommunications Act to effectively
provide code developers with the discretion whether to seek
replacement or variation of a code.

Paragraph
136(1)(a) of the Telecommunications Act requires the ACMA to
maintain a register of all industry codes required to be registered
under Part 6. Item 16 amends this paragraph to require the ACMA to
maintain the register to include all industry codes as they
‘are in force from time to time’. This amendment makes
clear that the ACMA must update the register when an industry code
registered under Part 6 of the Telecommunications Act is varied
(see proposed subsection 119A(3)).

Division 6A of Part 6 of the
Telecommunications Act - amended reimbursement
scheme

Division 6A of Part 6 of the Telecommunications
Act provides a scheme under which an industry body or association
may seek reimbursement from the ACMA of certain costs incurred by
the body or association in developing consumer-related industry
codes.

Items 17 to 30
amend Division 6A to extend the application of the reimbursement
scheme for developing consumer-related industry codes to also apply
to varying consumer-related industry codes.

Item 17
- Division 6A of Part 6 (heading)

Item 18
- Section 136A (heading)

Item 19
- Subsection 136A(1)

Item 20
- Subsection 136A(1)

Item 21
- Subparagraph 136A(2)(c)(i)

Item 22
- Section 136B (heading)

Item 23
- Before subsection 136B(1)

Item 24
- Subsection 136B(1)

Items 17 to 24
make various consequential amendments to the Division 6A heading
and sections 136A and 136B so that those provisions will refer to
both developing and varying consumer-related industry
codes.

Item 25
- After subsection 136B(2)

Item 25 inserts
proposed new subsections 136B(2A) and 136B(2B).

Proposed
subsections 136B(2A) and 136B(2B) largely mirror existing
subsections 136B(1) and 136B(2), respectively. Subsection 136B(2A)
sets out the matters of which the ACMA must be satisfied before
making a declaration that a body or association is eligible for the
reimbursement of its refundable costs in varying a consumer-related
industry code. Proposed subsection 136B(2B) provides that it is
only when the ACMA is satisfied of the matters listed in subsection
136B(2A) that it may make a declaration.

Item 25 also
inserts a new subheading for the general provisions contained in
subsections 136B(3) and 136B(4).

Item 26
- Section 136C (heading)

Item 27
- Subsection 136C(1) (heading)

Items 26 and 27
make consequential amendments to headings in section
136C.

Proposed
subsections 136C(3A), 136C(3B) and 136C(3C) largely mirror existing
subsections 136C(1), 136C(2) and 136C(3), respectively. Subsection
136C(3A) sets out the conditions that must be met before the ACMA
can give a written notice to an industry body or association
determining that the body or association is entitled to be paid a
specified amount as reimbursement for its costs in varying a
consumer-related industry code.

Proposed
subsection 136C(3B) provides that the specified amount the ACMA
must pay the industry body or association is either the total of
the costs that were incurred by the body or association in varying
the consumer-related industry code, or the estimate of the total of
the refundable costs that the body or association gave to the ACMA
along with its application (subparagraph 136A(2)(c)(i) as amended)
- whichever is lower.

Proposed
subsection 136C(3C) provides that the ACMA must pay the specified
amount to the industry body or association within 30 days after the
day on which the body or association was notified by the ACMA of
its entitlement to be refunded under proposed subsection
136C(3A).

Item 28 also
inserts a new subheading for the appropriation provision contained
in subsection 136C(4).

Section 128 of the Consumer Protection Act
requires each carrier and eligible carrier service provider to
enter into a scheme providing for the TIO. The scheme provides for
the TIO to investigate, make determinations and give directions
relating to complaints about carriage services by end-users of
those services.

On 4 May 2012, the Minister announced the
release of the Reform of the Telecommunications Industry
Ombudsman report (the TIO Report). A key recommendation of the
TIO Report was for legislative amendments to be made to provide
greater regulatory clarity around the TIO's role and its expected
standards of operation. In particular, the report recommended that
a set of framework principles should be legislatively established
for the operation of the TIO scheme, based on the Benchmarks for
Industry-based Customer Dispute Resolution Schemes (originally
released by the Minister for Customs and Consumer Affairs in August
1997). Currently, the TIO scheme is not required to comply with any
regulatory-based standards.

The TIO Report also recommended the
introduction of periodic mandatory, independent and public reviews
of the TIO scheme.

Items 31 and 32
amend Part 6 of the Consumer Protection Act to introduce these
measures.

Item 31 - At the end of section
128

Item 31 inserts proposed new subsections 128(8)
to 128(11) into section 128 of the Consumer Protection Act to
provide the Minister with the discretion to determine standards
with which the TIO must comply, by way of a legislative instrument.
If the Minister decides to exercise the power to make a legislative
instrument under new subsection 128(9), he or she must have regard
to the matters set out in new subsection 128(10), which are derived
from the Benchmarks for Industry-based Customer Dispute
Resolution Schemes . Further, before making a determination
under new subsection 128(9), the Minister must consult with the TIO
and the ACMA (proposed subsection 128(11)).

The intent of this amendment is to enable the
Minister to establish a set of framework principles to underpin the
TIO’s operations that are both consistent with best practice
for other external dispute resolution schemes and relevant to the
telecommunications industry. The Minister may update the standards
from time to time to take into account developments in best
practice for external dispute resolution schemes.

Item 32
- At the end of Part 6

Item 32 inserts
proposed new section 133A into the Consumer Protection Act, which
provides for periodic reviews of the TIO scheme.

Proposed
section 133A sets out requirements for reviews of the TIO scheme,
including:

· the timing of reviews - the
first review is to be completed within 3 years after the
commencement of this section and thereafter every 5
years;

· reviews are to be conducted by a
person or body independent of the TIO and the telecommunications
industry;

· reviews must provide for public
consultation, as well as consultation with the TIO and the
ACMA;

· reports of the reviews must be
provided to the Minister and published on the TIO’s website;
and

· the TIO must respond to any review
recommendations within 6 months of receiving a report, provide a
copy of the response to the Minister, and publish the response on
the TIO’s website.